CREDIT MARKETS

CREDIT MARKETS; INTEREST RATES MOVE LOWER

By MICHAEL QUINT

Published: September 11, 1981

Short- and long-term interest rates fell yesterday, but market participants agreed that trading was limited to speculators, with most institutional buyers waiting on the sidelines.

The bond market's rally in the last two days pushed the bellwether 13 7/8 percent Treasury bond due in 2011 from Tuesday's low of 92 18/32 to a high yesterday of 95 1/4 before it closed at 94 12/32 to yield 14.7 percent. Despite that improvement, ''the preponderance of opinion on the Street still seems to be cautious to bearish,'' said Elliott Platt, a credit market analyst at the Donaldson, Lufkin & Jenrette Securities Corporation.

One prominent concern of the marketplace continues to be the possibility that a growing economy and heavy Treasury borrowing will raise interest rates. Another is that rates are already so high they will cause some unpredictable financial calamity.

Demand for Commercial Paper

''Our market has definitely benefited from both those worries because everybody wants 15- to 45-day maturities,'' one of the largest dealers in commercial paper said. The demand for short-term maturities has been strong enough to accommodate a $30 billion increase in commercial paper this year, to more than $150 billion outstanding, causing paper rates to rise relative to other shortterm instruments. Yesterday, top-rated 30-day paper was sold at a 16 7/8 percent rate.

''The last I saw, the Treasury still has a ton of paper to sell, so it is hard to get too optimistic,'' one Government securities dealer said. The Treasury's appetite was illustrated yesterday when it announced plans to sell $4.75 billion of new two-year notes on Sept. 16 and $3.25 billion of four-year notes on Sept. 23. Minimum denominations are $5,000 for two-year notes and $1,000 for four-year notes.

Late in the day, the outstanding 16 1/4 percent notes due in two years were offered at 99 1/4 to yield 16.7 percent. Several securities dealers said the mere mention of credit controls by Republican legislators was enough to cause buying by traders who wanted to cover their short positions. They stressed, however, that rumors of credit controls had not touched off much buying by institutions. Strong Uncertainty Cited

The uncertainty about short-term rates is one important reason why ''this is nearly a 100 percent traders' market,'' said Morgan Stark, a senior vice president at the Chemical Bank. Uncertainty is so strong, Mr. Stark said, that the bank is passing up investments with yields of 16 percent and more ''because we don't know where things will be in two weeks.''

Yesterday, the overnight rate for bank loans in the Federal funds market hovered around 16 1/2 percent. Money market specialists said there were no signs that the Fed was trying to provide the banking system with the additional credit needed to push the funds rate below 16 percent.

Along with many other analysts, Mr. Stark noted that business demand for credit had kept rates high, and that curbs on business borrowing would probably disrupt the economic expans ion forecast by the Reagan Ad ministration.

In fact, many analysts recall that, before controls were imposed in March 1980, business credit demands were increased by rumors of financial controls as corporate treasurers arranged unneeded precautionary borrowings and lines of credit. Fannie Mae Issue Sells Well

In agency financing, the Federal National Mortgage Association's $400 million issue of 17-month debentures was selling well with a yield of 17 1/2 percent, dealers said. They noted that demand from savings institutions for Fannie Mae and other agency issues was substantially i ncreased by the tax-exempt sav ings certificates that go on sale Oct. 1. The inflow of deposits mea ns more purchases of short- and intermediate-term agency debt, the y explained, since agency securities are among the eligible uses for the new deposits.

While the new source of funds is welcome by savings institutions, some analysts worry that the certificates could cause problems for the credit markets. Basically, they reason that directing more money to the thrift industry will mean higher interest rates for other sectors of the economy.

In the tax-exempt market, the City of Boston turned to the shortterm market to find the cash it needs before real estate taxes are paid in November. The city sold $30 million of 60-day notes to a group of banks at an interest rate of 13.33 percent, or 65 percent of the current prime rate of 20 1/2 percent.

This week's new corporate offerings were well received, investment bankers said, though it took peak yields to attract buyers. Securities firms said problems resulting from Wednesday's power failure in parts of lower Manhattan were not serious and had little lasting effect.